Key Highlights
- The New Zealand Dollar formed a base near 0.6710 and moved higher against the US Dollar.
- The NZD/USD pair is attempting a close above a key bearish trend line with resistance at 0.6820 on the 4-hours chart .
- The US Manufacturing PMI in July 2018 (Prelim) increased from the last reading of 55.4 tom 55.5.
- The New Zealand Trade Balance in June 2018 posted a deficit of $113M (MoM), compared with the forecast of $200M surplus.
NZDUSD Technical Analysis
The New Zealand Dollar formed a decent bottom near the 0.6700 level against the US Dollar. The NZD/USD pair traded higher and is currently facing a couple of important resistances near 0.6840-0.6850.
Looking at the 4-hours chart, the pair tested the 0.6720 support area on a couple of occasions, but sellers failed to gain momentum. As a result there, was a decent bounce and the pair managed to move above the 0.6760 resistance and the 100 simple moving average (red, 4-hours).
At the outset, the pair is attempting a close above a key bearish trend line with resistance at 0.6820. However, the pair needs to break the last swing high near the 0.6840 level and the 200 simple moving average (green) to move into a bullish zone.
Above 0.6840-50, the pair is likely to gain traction towards the 0.6900 and 0.7000 levels. On the other hand, if the pair fails to settle above 0.6850 and the 200 SMA, it could decline once again.
On the downside, supports are seen near 0.6765 and 0.6750. Below this last, the pair may revisit the 0.6710-20 support zone.
Recently in the US, the Manufacturing PMI for July 2018 (Prelim) was released by the Markit Economics. The market was looking for no change in the PMI from the last reading of 55.4.
The actual result was positive as there was an increase in the PMI from 55.4 to 55.5. There was a minor dip in NZD/USD, but the pair is still well supported above the 100 SMA.
Economic Releases to Watch Today
- German IFO Business Climate Index for July 2018 – Forecast 101.5, versus 101.8 previous.
- German current assessment index July 2018 – Forecast 104.8, versus 105.1 previous.
- German expectations index for July 2018 – Forecast 98.1, versus 98.6 previous.
- UK’s CBI Distributive Trades July 2018 (MoM) – Forecast 15%, versus 32% previous.
- US New Home Sales for June 2018 (MoM) – Forecast -2.8% versus +6.7% previous.
